Dubai named as hottest real estate investment market for 2017

The top real estate investment destination for 2017 has been named as Dubai in a new survey ranking the most appealing property investment locations.

Cluttons' Middle East’s Private Capital survey revealed that Dubai had overtaken London as the most attractive real estate investment location, with a swarm of new investors circling around the emirate's prime property sector following the election of Donald Trump as President of the United States. Other factors which have contributed to the rise in interest in Dubai property include the upcoming Expo 2020, due to be held in the emirate, which has seen the ongoing potential of Dubai's property market rise on a global scale, as well as uncertainty across other property markets located around the world.

London had to be content with second position on the survey, while Canada's popular city of Toronto took joint third place along with Abu Dhabi, Singapore, Kuala Lumpur and New Delhi as keen investors’ other top picks for next year.

Head of research at Cluttons, Faisal Durrani, said that Dubai's real estate market is well respected and well-understood, which is why it continues to prove popular with investors: "At this early stage, it certainly makes London look like a much safer investment hub for Middle East investors; however, with currencies pegged directly to the dollar, the pull of a London investment may be eroded to an extent, should the dollar slide in the coming weeks and months.

“This may well strengthen the appeal of an investment closer to home, helping markets such as Dubai benefit from any temporary recoiling in global property investment appetite.”

Propertytrader.ae, an online real estate portal based in the UAE, agreed with the Cluttons research, saying that it had seen a marked rise in enquiries from investors following the US shock election victory. It is thought that US investors could be viewing Dubai as a safe haven following the election result and be looking to inject their capital into the emirate in the hope of securing assets in strong locations in order to achieve positive levels of growth over the long-term.

Steven Morgan, senior partner at Cluttons, said: "Uncertainty is relative and it's clear that it's going to linger, so markets like Dubai are likely to benefit from more inward investment as investors gravitate to locations on their doorstep with a proven track-record."

Mr Morgan also warned that it was important for investors to consider the potential implications on the region's property markets that could come about as a result of any policy changes due to be made by incoming President Trump, all of which could impact investor confidence across the region. Imported inflation was also likely to see an uptick, Mr Morgan went on to say, citing the weaker dollar for this rise. This uptick could lead to household finances across the Middle East, many of which are already stretched, at risk of further falls.

“Although we have witnessed improvements in the price of oil and value of the US dollar, following initial declines directly after the election announcement, we are still cautious of the long-term performance of both following the US presidential inauguration in January next year.

“Any further contraction in oil prices will also have negative ramifications for the property markets, especially where the oil sector dominates office take up and is responsible for the bulk of new household creation," Mr Morgan concluded.

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